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Originally Posted by lumpynose
Doitsu's answer is exactly what I was thinking. And does amazon still sell books in mobi format?
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Mobi aka Mobipocket format is delivered to Kindles (Kindle 1, Kindle 2, Kindle DX/DX-G) that cannot handle KF8. This way, Amazon can keep supporting these obsolete devices with an obsolete format.
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I also find using the word watermark confusing; to me a watermark is some semitransparent text (or image) overlaying the original text, like a big "Draft" going from corner to corner. The original post from dyxan didn't use the word watermark.
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In this case, a watermark is used to embed something that can be used as an identifier. In this case, the watermark is used in an eBook to identify who purchased it. I know where Amazon stores the watermark they use (it's in the OPF) and it is very easy to remove if the file KF8 without DRM. But I have never seen or previously heard of Amazon using a watermark that is your name and email address.